Appeal Details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 6352 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 6 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-03-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
25-08-2014
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. N O. 4 676 /DEL/201 4 A.Y . : 20 1 1 - 1 2 AIRADS LTD., 4624/18, ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002 (PAN: AAACA5793R) VS. ACIT, CENTRAL CIRCLE - 19, E-2, ARA CENTRE (THIRD FLOOR) JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : S H. VED JAIN, ADV DEPARTMENT BY : SH. S.K. JAIN, DR ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNE D ORDER DATED 23.5.2014 PASSED BY THE LD. CIT(A)-XXXIII, NEW DELH I RELEVANT TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER HAS ERRED IN ASSESSING THE INCOME OF THE APPELLANT COMPANY AT RS. 65,27,640 AS AGAINST RETURN FILED DE CLARING INCOME AT RS. 33,23,900 AFTER MAKING ADDITION/DISALLOWANCE AGGREGATING RS. 32,03,740, ON WHOLLY ILLEGAL AND FRIVOLOUS GROU NDS, UNTENABLE IN LAW. IT IS PRAYED THAT THE ADDITION MADE TO INCO ME BE DIRECTED TO BE DELETED. 2. THAT THE ASSESSING OFFICER HAS ERRED IN ADDI NG AMOUNTS RECEIVED FROM 2 FOLLOWING THREE ENTITIES TOWARDS SHARE CAPITAL AS U NDISCLOSED INCOME OF THE ASSESSEE COMPANY UNDER SECTION 68 OF THE INC OME TAX, ACT, 1961: (I) RS 10,25,000 RECEIVED FROM M/S GALAXY CORNMONSALES PVT LTD. (II) RS 6,50,000 RECEIVED FROM M/S UMAPATI VINMAY PVT LT D. (III) RS. 15,00,000 RECEIVED FROM SH KUNAL SHIKARP URI. IT IS PRAYED THAT THE ADDITION MADE TO INCOME BE DI RECTED TO BE DELETED. 3. THAT THE ASSESSEE COMPANY HAS DISCHARGED THE ON US CAST UPON IT IN LAW TO ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE SHARE HOLDER WHO HAD SUBSCRIBED TO THE SHARE CAPITAL OF T HE COMPANY, AND THE GENUINENESS OF THE TRANSACTIONS. THE ADDITI ON MADE TO INCOME U/S 68 OF THE ACT, IS .THUS ILLEGAL, WITHOUT JURISDICTION, AND REQUIRES TO BE DELETED IN ENTIRETY. 4.01 THAT THE ADDITION MADE TO INCOME IS INCORRECT AND IS AGAINST LAW IN VIEW OF THE DECISION OF THE HON'BLE APEX COURT IN C OMMISSIONER OF INCOME TAX VS LOVELY EXPORTS (P) LTD., 216 CTR 195, SUBSEQUENTLY FOLLOWED AND APPLIED BY THE HON'BLE DELHI HIGH COUR T IN COMMISSIONER OF INCOME-TAX VS STELLAR INVESTMENT LT D (DELHI), WHEREIN THE HON'BLE COURTS HAVE HELD THAT WHERE THE SHARE APPLICATION MONEY IS ALLEGED TO HAVE BEEN RECEIVED FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO , THE REVENUE SHOULD PROCEED TO REOPEN THE ASSESSMENTS OF SUCH SHAREHOLDERS IN ACCORDANCE WITH LAW. 3 4.02 THAT THE ADDITION MADE TO INCOME IS INCORRECT AND IS AGAINST LAW IN VIEW OF THE DECISION OF THE FULL BENCH OF THE DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS. SOPHIA FINANCE LTD., 205 ITR 98, WHEREIN IT IS HELD THAT WHERE THE SHAREHOLDERS EXIS T, NO FURTHER ENQUIRY NEED BE MADE, AND THE AMOUNT INVESTED IS A CAPITAL RECEIPT IN THE HANDS OF THE RECIPIENT COMPANY. 4.03 THAT THE ADDITION MADE TO INCOME IS INCORRECT AND IS AGAINST LAW IN VIEW OF THE DECISION OF THE HON'BLE BOMBAY HIGH COU RT IN CIT VS. M/S CREATIVE WORLD TELEFILMS LTD., WHEREIN IT IS HE LD THAT NO ADDITION TO INCOME CAN BE MADE WHERE THE ASSESSEE P ROVIDES DETAILS, NAMES, ADDRESS, PAN, CHQ NOS, NAME OF THE BANKS OF THE SHAREHOLDERS, AND THE AO DID NOTHING, EXCEPT ISSUE SUMMONS WHICH WERE RETURNED BACK WITH AN ENDORSEMENT 'NOT TRACEAB LE', AND FAILS TO MAKE PROPER INVESTIGATION. 4.04 THAT THE ADDITION MADE TO INCOME IS INCORRECT AND IS AGAINST LAW IN VIEW OF THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN MADHURI INVESTMENTS PVT. LTD. VS. ACIT, WHEREIN IT IS HELD THAT ADDITION TO INCOME ON THE BASIS THAT THE SHARE APPL ICANTS DID NOT APPEAR AND NOTICES SENT TO THEM WERE RETURNED WITH REMARKS 'NO SUCH PERSON' IS INCORRECT AND NOT SUSTAINABLE. 4.05 THAT THE ADDITION MADE TO INCOME IS INCORRECT AND IS AGAINST LAW IN VIEW OF THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN COMMISSIONER OF INCOME TAX VS. AKJ GRANITES (P) LTD . 301 ITR 298 (RAJ.) REFERRING TO THE DECISION IN THE CASE OF BAR KHA SYNTHETICS LTD. VS. ASST. CIT (2005) 197 CTR (RAJ.) 432, WHEREIN I T IS HELD THAT WHERE SHARE APPLICATIONS ARE RECEIVED AND ACCOMPANI ED WITH 4 SHARE APPLICATION MONEY, NO PRESUMPTION CAN BE DRAW N THAT THE SAME BELONG TO THE ASSESSEE, AND NO AMOUNT CAN BE A SSESSED AS UNDISCLOSED INCOME OF THE ASSESSEE. 4.06 THAT THE AO HAS MADE ADDITION TO INCOME U/S. 6 8 OF THE ACT ON MERE SURMISE AND CONJECTURE, IN HASTE AND WITHOUT P ROVIDING ANY REASONABLE OPPORTUNITY TO THE ASSESSEE COMPANY TO D EFEND ITS CASE, VITIATING THE ASSESSMENT, RENDERING IT BAD IN LAW, LIABLE TO BE QUASHED. 4.07 THAT THE ADDITION MADE TO INCOME IN RESPECT O F AMOUNT RECEIVED FROM KUNAL SHIKARPURI, IS ON MERE SURMISE AND CONJE CTURE AND DISBELIEF, AND THUS ILLEGAL, UNWARRANTED AND UNTENA BLE IN LAW, LIABLE TO BE QUASHED / DELETED, AS THE AO EXPRESSED SATISF ACTION WITH REGARD TO IDENTITY, CREDIT WORTHINESS AND GENUINEN ESS OF THE AMOUNT RECEIVED AND SOUGHT NO FURTHER DETAILS, INFORMATIO N, EXPLANATION FROM THE ASSESSEE COMPANY, AND DID NOT ALSO MAKE AN Y FURTHER INVESTIGATION FROM THE SHARE HOLDER. 5. THAT THE APPELLANT COMPANY CRAVES LEAVE TO AMEND , MODIFY, DELETE ALL OR ANY OF THE GROUNDS OF APPEAL ABOVE, AND TO A DD ANY FURTHER GROUND OF APPEAL, BEFORE AND DURING THE APPEAL PROC EEDINGS. 4.01 THAT THE ADDITION MADE TO INCOME IS INCORREC T AND IS AGAINST LAW IN VIEW OF 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 WAS E-FILED ON 30.9.2011 DECLARING TOT AL INCOME OF RS. 33,23,900/- BY THE ASSESSEE COMPANY. THE CAS E WAS SELECTED FOR SCRUTINY UNDER CASS UNDER COMPULSORY CATEGORY AND A STATUTOR Y NOTICE UNDER SECTION 5 143(2) OF THE I.T. ACT, 1961 DATED 3.8.2012 WAS ISS UED AND SERVED ON THE ASSESSEE. THEREAFTER, NOTICE U/S.142(1) OF THE ACT WITH A QUESTIONNAIRE WAS ISSUED ON 31.5.2013 AND AFTER THE CHANGE OF THE CHA RGE OF THE CASE, NEW NOTICE U/S. 142(1) DATED 28.12.2013 WAS ISSUED AND SERVED ON THE ASSESSEE PERSONALLY. IN RESPONSE THERETO, THE ASSESSEE DIRECTOR AND SH . VIPIN JAIN, CA ATTENDED THE PROCEEDINGS ON BEHALF OF THE ASSESSEE COMPANY FROM TIME TO TIME AND SUBMITTED /PRODUCED THE NECESSARY DETAILS, DOCUMENTS AND CLAR IFICATIONS. BOOKS OF ACCOUNT OF ASSESSSEE, BANK ACCOUNTS AND SOME SUPPOR TING BILLS AND VOUCHERS WERE PRODUCED WHICH WERE SEEN ON TEST CHECK BASIS. DURING THE YEAR, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF ADVE RTISING AND PURCHASE AND SALE OF SHARES / DERIVATIVES. THEREAFTER, THE AO CO MPLETED THE ASSESSMENT AT AN INCOME OF RS. 65,27,640/- BY PASSING THE ORDER DAT ED 07.3.2014 U/S. 143(3) OF THE I.T. ACT, 1961 BY HOLDING THAT THE NEW SHARE CAPITAL OF RS. 6350/- AND SHARE PREMIUM OF RS. 31,68,650/- TOTALING TO RS. 31 ,75,000/- CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IS UNEXPLAINED CR EDITS U/S.68 OF THE I.T. ACT, 1961 AND THE SAME WAS ADDED TO THE INCOME OF THE AS SESSEE. IT WAS FURTHER HELD THAT IN EARLIER YEAR I.E. IN AY 2010-11 ALSO, THE A SSESSEE HAD DEBITED THE LOSS FROM SPECULATIVE TRANSACTIONS IN THE P/L A/C WHICH WAS ALSO DISALLOWED. 3. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEA LED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 23.5.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL OF THE ASSESSEE STATED THAT ASSESSEE HAS FILED ALL NECESSARY DOCUMENTARY EVIDENCE BEFORE THE AO AS WELL AS BEFOR E THE LD. CIT(A) FOR SUBSTANTIATING ITS CLAIM AND IN SPITE OF THE SAME THE REVENUE AUTHORITY HAS 6 WRONGLY MADE THE ADDITION IN DISPUTE. HE DRAW OUR ATTENTION TOWARDS THE PAPER BOOK FILED BY HIM CONTAINING PAGES 1 TO 106 IN WHI CH HE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. HE FURTHER DRAW OUR ATTENTION TOWARDS PAGE NO. 28 TO 73 ESTABLISHING THAT HE ASSESSEE HAS FILED SHARE APPLICATION FORMS DATED 1 1.12.2010 AND 3.1.2011; COPY OF AFFIDAVITS OF THE DIRECTOR OF SHARE APPLICANT CO MPANY; COPY OF ACKNOWLEDGEMENT OF ITR FOR AY 2010-11; COPY OF AUDI TED FINANCIAL STATEMENTS OF THE SHARE APPLICANT COMPANY FOR AY 2011-12; COPY OF BANK STATEMENT OF THE SHARE APPLICANT COMPANY FOR THE RELEVANT PERIOD; CO PY OF BANK STATEMENT OF THE ASSESSEE COMPANY REFLECTING THE TRANSACTIONS ; COPY OF NOTICE DATED 17.2.2014 ISSUED BY THE AO REQUESTING THE ASSESSEE TO PRODUCE THE CONTROLLING PERSONS OF THE SHARE APPLICANT COMPANIES IN ORDER TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE PARTIES; COPY OF THE LETTER DATED 22.2.2014 ISSUED BY M/S GALAXY COMMONSALES PVT. LTD. CONFIRMING THE I NVESTMENT MADE IN ASSESEE COMPANY AND FURTHER GIVING THEIR UPDATED ADDRESS; C OPY OF LETTER DATED 21.2.2014 BY M/S UMAPATI VINIMAY PVT. LTD. CONFIRMI NG THE INVESTMENT MADE IN ASSESSEE COMPANY AND FURTHER GIVING THEIR UPDATED A DDRESS AND THE COPY OF WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) WH ICH WAS NOT DISPUTED BY THE AO IN THIS ORDER. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN SPITE OF THE AFORESAID DOCUMENTARY EVIDENCE FILED BY THE ASSESSE E BEFORE THE REVENUE AUTHORITY FOR ESTABLISHING THE CREDITWORTHINESS, I DENTITY AND GENUINENESS OF THE TRANSACTIONS. THE REVENUE AUTHORITY ONLY EMPHASIZE UPON THE PRODUCTIONS OF DETAILS OF PERSONS WITH COMPLETE ADDRESS OF THE NEW INVESTORS ALONGWITH DETAILS OF SHARE ALLOTTED TO THEM. THE ASSESSEE WAS ALSO A SKED TO PRODUCE THE COPIES OF BANK STATEMENT OF INVESTORS AND THEIR INCOME TAX DE TAILS. THE ASSESSEE SUBMITTED ALL THESE DOCUMENTS. LD. COUNSEL OF THE ASSESSEE AL SO STATED THAT THE SINCE THE ONUS OF PROVING CASH CREDIT IN THE BOOKS IS REUBUTT ABLE. THE ASSESSEE HAS TO 7 DISCHARGE THE INITIAL ONUS BY PROVING THE IDENTITY OF THE CREDITOR BY FILING THE CONFIRMATORY LETTER AND OTHER RELEVANT DETAILS. IT WAS FURTHER STATED THAT BY FILING THE CONFIRMATORY LETTER; COPY OF ITR; COPY OF SHARE APPLICATION FORM AND COMPLETE NAME AND ADDRESS OF SHARE APPLICANTS THE ASSESSEE H AS ESTABLISHED THE IDENTITY OF THE SHARE APPLICANT AND THE GENUINENESS OF TRA NSACTION IS ROUTED THROUGH BANK CHANNEL, HENCE, THE TRANSACTION IS ESTABLISHED . IN SUPPORT OF HIS CONTENTION HE RELIED UPON THE FOLLOWING CASE LAWS AND STATED T HAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THESE DECISIONS AND REQUESTED T O DELETE THE ADDITION IN DISPUTE. IT WAS FURTHER STATED THAT AO HAS NOWHERE BEEN ABLE TO POINT OUT ANY DEFECT OR ERROR IN THE SAID EVIDENCES. - JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF PR. CIT VS. SOFTLINE CREATIONS PVT. LTD. (2016) 387 ITR 636 (DEL.) - JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF PR. CIT VS. GREEN VALLEY PLYWOOD LIMITED (ITA NO. 358/2016 DATED 1.6. 2016) - CIT VS. FAIR FINVEST LTD. (2013) 357 ITR 146 (DE L.) - CIT VS. GOEL SONS GOLDEN ESTATE P LTD. ITA NO. 21 2/2012 DATED 11.4.2012. - CIT VS. GANGESHWARI METAL (P) LTD. (2014) 361 I TR 10 (DELHI) (HC) - PR. CIT VS. RAKAM MONEY MATTERS P LTD. (DELHI HC) - CIT VS. LOVELY EXPORTS PVT. LTD. (2009) 319 ITR 5 (SC). 6. LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE STATED THAT THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVE THAT IT DI D NOT TAKE AN ACCOMMODATION ENTRY, WHICH THE ASSESSEE HAS NOT DONE. THEREFORE, HE STATED THAT THE LOWER 8 AUTHORITIES WERE RIGHT IN MAKING THE ADDITIONS IN D ISPUTE. IN SUPPORT OF HIS CONTENTION, 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AVAILABLE WITH US AND THE SYNOPSIS SUBMITTED BY THE LD. COUNSEL OF TH E ASSESSEE AND THE CASE LAWS RELIED BY HIM. WE FIND THAT ASSESSEE HAS FILED ALL THE NECESSARY DOCUMENTARY EVIDENCES BEFORE THE AO AS WELL AS BEFORE THE LD. C IT(A) FOR SUBSTANTIATING ITS CLAIM. ON PERUSING THE PAPER BOOK, WE NOTE THAT ASSESSEE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCES WHICH HE FILED BEFORE THE LOWER AUTHORITIES. THE PAGE NOS. 28 TO 73 HAVE BEEN ESTABLISHING THAT HE A SSESSEE HAS FILED SHARE APPLICATION FORMS DATED 11.12.2010 AND 3.1.2011; CO PY OF AFFIDAVITS OF THE DIRECTOR OF SHARE APPLICANT COMPANY; COPY OF ACKNOW LEDGEMENT OF ITR FOR AY 2010-11; COPY OF AUDITED FINANCIAL STATEMENTS OF TH E SHARE APPLICANT COMPANY FOR AY 2011-12; COPY OF BANK STATEMENT OF THE SHARE APPLICANT COMPANY FOR THE RELEVANT PERIOD; COPY OF BANK STATEMENT OF THE ASSE SSEE COMPANY REFLECTING THE TRANSACTIONS ; COPY OF NOTICE DATED 17.2.2014 ISSUE D BY THE AO REQUESTING THE ASSESSEE TO PRODUCE THE CONTROLLING PERSONS OF THE SHARE APPLICANT COMPANIES IN ORDER TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE PARTIES; COPY OF THE LETTER DATED 22.2.2014 ISSUED BY M/S GALAXY COMMON SALES PVT. LTD. CONFIRMING THE INVESTMENT MADE IN ASSESEE COMPANY AND FURTHER GIVING THEIR UPDATED ADDRESS; COPY OF LETTER DATED 21.2.2014 BY M/S UMA PATI VINIMAY PVT. LTD. CONFIRMING THE INVESTMENT MADE IN ASSESSEE COMPANY AND FURTHER GIVING THEIR UPDATED ADDRESS AND THE COPY OF WRITTEN SUBMISSION S FILED BEFORE THE LD. CIT(A) WHICH WAS NOT DISPUTED BY THE AO IN THIS ORDER. 7.1 WE FURTHER NOTE FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE CORRECTNESS OF ALL THESE DOCUMENTS OR MADE ANY ADVERSE COMMENTS IN RESPECT OF THE SAME. FURTHER, THERE IS NO ADVERSE INFORMATION FROM 9 INVESTIGATION WING OR FROM ANY OTHER AGENCY. AS PER THESE DOCUMENTS, IT IS EVIDENT THAT ASSESSEE HAS ESTABLISHED IDENTITY, SOU RCE AND GENUINENESS OF SHARE CAPITAL. THERE IS THUS NO GROUND OR BASIS TO DISPU TE THE CORRECTNESS OF THE SHARE CAPITAL AS THE SAME IS FULLY SUPPORTED FROM FACTS A ND SETTLED LEGAL PRINCIPLES AS LAID DOWN IN THE FOLLOWING CASES:- A. CIT VS. RHOMBUS INTERNATIONAL PVT. LTD. (ITA NO. 22 3/13. THE RELEVANT OBSERVATION OF THE HON'BLE DELHI COURT ARE EXTRACTE D HEREUNDER: 14. IT IS NOT THE CASE OF THE REVENUE THAT THESE P ERSONS ARE ENTRY PROVIDERS AND THERE WAS ANY OTHER MATERIAL OR DOUBT THAT THESE WERE BOGUS ENTRIES ROUTED THROUGH FICTITIOUS OR NAM E LENDERS. ASSESSING OFFICER DID NOT CONDUCT ANY INVESTIGATION BY SENDING INSPECTOR TO THE ADDRESS AND NOTHING HAS BEEN BROUG HT ON RECORD TO SHOW STEPS OR ATTEMPT BY THE ASSESSING OFFICER TO G O DEEPER AND FIND OUT/CHECK VERACITY OF THE ASSERTION. THE SHARE APPLICATION MONEY ADDITION IS NOT IN ISOLATION BUT HAS TO BE EX AMINED WITH OTHER ADDITIONS ON SIMILAR GROUNDS. ABSENCE OF VERIFICATI ON, DIFFERENT ADDITIONS MADE AND REASONING GIVEN FOR DELETING THE ADDITIONS ARE PLAUSIBLE. THE ORDER OF THE TRIBUNAL IS NOT PERVERS E AND DOES NOT REQUIRE INTERFERENCE. NO SUBSTANTIAL QUESTION OF LA W ARISE. B. CIT .V. GANGESHWARI METAL (P.) LTD. (2014) 361 I TR 10 (DELHI) (HC) S.68 CASH CREDITS-SHARE APPLICATION MONEY-EVIDENC E FURNISHED BY ASSESSEE-ADDITION WAS NOT JUSTIFIED. THE ASSESSEE R ECEIVED CERTAIN AMOUNT AS SHARE APPLICATION MONEY. IN ORDER TO PROVE GENUINENESS OF TRANSACTION, THE ASSESSEE BROUGHT ON RECORD VARIOUS DOCUMENTS SUCH AS NAMES AND ADDRESSES OF SH ARE 10 APPLICANTS, CONFIRMATORY LETTERS OF SHARE APPLICANT S, COPIES OF THEIR BANK STATEMENTS ETC. THE ASSESSING OFFICER FO UND THE ASSESSEE'S EXPLANATION TO BE UNACCEPTABLE AND, CONSEQUENTLY, ADDED THE AMOUNT OF SHARE APPLICATION MONEY TO ASSESSEE'S TAXABLE INCOME WHICH WAS DELETED BY T HE COMMISSIONER(APPEALS). THE TRIBUNAL UPHELD THE ORDE R OF THE COMMISSIONER (APPEALS).ON APPEAL HIGH COURT HELD TH AT, THERE WAS A CLEAR LACK OF INQUIRY ON THE PART OF TH E ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED ALL THE REL EVANT MATERIAL. IN SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER S. 68. (A Y. 2004-05). C. CIT V. KAMDHENU STEEL & ALLOYS LTD., SLP (CC) NO. 15640 OF 2012, DATED 17-09-2012 (SUPREME COURT) ISSUE INVOLVED: 'WHETHER ONCE THE ASSESSEE HAS DISC HARGED THE INITIAL BURDEN BY FILING ADEQUATE EVIDENCE/MATERIAL , REVENUE IS SUPPOSED TO DISLODGE THE INITIAL BURDEN DISCHARGED BY THE ASSESSEE AND TO THROW THE BALL AGAIN IN THE ASSESSEE'S' COUR T DEMANDING THE ASSESSEE TO GIVE SOME MORE PROOFS, AS THE DOCUMENTS PRODUCED EARLIER BY THE ASSESSEE EITHER BECOME SUSPECT OR AR E RENDERED INSUFFICIENT IN VIEW OF THE MATERIAL PRODUCED BY TH E DEPARTMENT REBUTTING THE ASSESSEE'S DOCUMENTARY EVIDENCE?' DECIDED IN FAVOUR OF : ASSESSEE HELD: THE HON'BLE SUPREME COURT HAS DISMISSED THE S PECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE CIT V. KAMDHENU STEEL & ALLO YS LTD. [2014] 361 ITR 220 IN WHICH IT HAS BEEN HELD: CASH CREDITS --UNEXPLAINED 11 INVESTMENTS--BURDEN OF PROOF--SHARE APPLICATION MON EY--ASSESSEE EXPLAINING SOURCE' OF MONEY-IDENTITIES OF APPLICANT S AND THEIR CREDITWORTHINESS ESTABLISHED--BURDEN OF PROOF DISCH ARGED BY ASSESSEE--ONUS SHIFTED TO DEPARTMENT--NO EVIDENCE T O SHOW TRANSACTIONS WERE NOT GENUINE--SECTIONS 68 AND 69 N OT APPLICABLE- -INCOME-TAX ACT, 1961, SS. 68, 69: D. BESIDES, ABOVE CASE LAWS, THE HONBLE APEX COURT A LSO IN THE CASE OF CIT VS. LOVELY EXPORTS 216 CTR 195 HAS HELD THAT TH AT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AS SESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN TH EIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT B E REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. E. DELHI HIGH COURT IN THE CASE OF PR. CIT VS. GOODVI EW TRADING PVT. LTD. 2016 (12) TMI 617 DATED 21.11.2016 WHEREIN THE C OURT HAS HELD AS UNDER:- THE CIT(A)S REASONING THAT THE MATERIALS CLEARL Y POINTED TO THE SHARE APPLICANTS POSSESSING SUBSTANTIAL MEANS TO I NVEST IN THE ASSESSEES COMPANY. THE AO SEIZED CERTAIN MATERIAL TO SAY THAT MINIMAL OR UNSUBSTANTIAL AMOUNTS WAS PAID AS TAX BY SUCH SHARE APPLICANTS AND DID NOT CARRY OUT A DEEPER ANALYSIS OR RATHER CHOSE TO IGNORE IT. IN THESE CIRCUMSTANCES, THE INFERENCES D RAWN BY THE CIT(A) ARE NOT ONLY FACTUAL BUT FACIALLY ACCURATE DECID ED IN FAVOR OF THE ASSESSEE. 12 7.2 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS OF THE HONBLE SUPREME COURT AND HI GH COURTS, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FULLY PROVED ITS BURDE N AND DISCHARGED THE ONUS UPON THE DEPARTMENT, HOWEVER, NO CONTRARY EVIDENCE WAS SHOWN BY THE AO WHICH WILL PROVE THAT THE TRANSACTIONS WERE NOT GEN UINE, THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IS T OTALLY UNWARRANTED AND THE SAME NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE T HE ADDITION IN DISPUTE AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/3/2017. S SS SD DD D/ // /- -- - S SS SD DD D/ // /- -- - [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 22/03/2017 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES
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